Corporate America's Loyalty Now Global

October 1, 2007

As the toadies in charge of Columbia University in New York City provided a forum for the Left's latest rock star, Mahmoud Ahmadinejad, to spout his propaganda, another story grabbed my attention. Given the recent news reports of tainted products from the world's largest communist country, imagine my surprise and anger when I picked up my morning paper and read this Associated Press headline: "Mattel takes recall blame, makes apology to China."

Apparently, our corporate leaders are now expected to lick the boots of Chinese officials and take the blame for recalling junk toys from our markets because they were painted with lead-based paint.

According to the AP, "Mattel, Inc. tried to save face Friday with Chinese officials, taking the blame for the recent recalls of millions of Chinese-made toys as it strives to mend a strained relationship with the nation that makes most of its toys and fattens its profit."

Save face? Whose face needed saving here? And with whom? Mattel is the world's largest toy maker. The company established a presence in China 25 years ago and now makes about 65 percent of its products there. More than 80 percent of all toys sold in the U.S. are made in China. The Chinese pledged to make a quality product for a given price. Instead, they produce toys that could potentially poison our children, just as they produced the now-recalled pet food that poisoned hundreds of American dogs and cats.

Yet Mattel officials felt compelled to send their executive vice president, Thomas Debrowski, to personally grovel at the feet of China's product safety chief, Li Changjang: "Mattel takes full responsibility for these recalls and apologizes personally to you, to the Chinese people and to all of our customers who received the toys," Debrowski told Li as reporters and lawyers looked on.

Debrowski's apology comes as plans are being laid for Mattel Chairman and Chief Executive Officer Robert Eckert to make his own trek to China. No doubt, Eckert will be required to grovel as well.

What's going on here? When did the titans of American industry become so subservient to the Chinese government that they have to apologize for a recall that was made necessary by inferior, potentially toxic Chinese-made products?

Until recently, the United States Senate had to revisit the issue annually of bestowing upon China what was then called "Most Favored Trading Status." Can there be any doubt that the Senate's decision to give permanent preferred trade status to the Chinese has contributed to the atmosphere we see today, where American CEOs tremble at the mere mention of falling stock prices?

Mattel's stock has fallen from the mid-$23 level following the first recall in early August to a low of $20.97 on Sept. 10. Shares have since rebounded, increasing 38 cents, or 1.6 percent, to $23.94 on Friday, Sept. 21st.

"Mattel certainly must have been facing some pressure to do that," said Eric Johnson, a professor of operations management at Dartmouth College, commenting on the apology, "because you can't imagine why they would be trying to push this story along any further."

He went on to say that Mattel may want to prevent China from imposing more taxes and regulations.

Peter Navarro, a business professor at the University of California, Irvine, and author of "The Coming China Wars," also suggested that Mattel was trying to avoid punitive measures.

"Mattel is worried that the Chinese government is going to make it difficult for them to produce, put their costs up and hurt their stock price," Navarro said.

At their very public meeting, Li upbraided Mattel for weak safety controls and reminded Debrowski that "a large part of your annual profit comes from your factories in China."

Manufacturing toys in China has helped Mattel and other U.S. companies lower manufacturing and labor costs and boost profits.

But at what cost? All Americans should be aware that so-called American companies no longer owe their allegiance to this country. They are globalists.

Doug Patton describes himself as a recovering political speechwriter who agrees with himself more often than not. His weekly columns are syndicated by Cagle Cartoons newspaper syndicate. Readers are encouraged to email him at dpatton@cagle.comand/or to follow him on Twitter at @Doug_Patton.